Krugman blog 3/12/13

Four posts yesterday, including a guest post. The first up was “The Eurobeatings Will Continue:”

Until morale improves. So says José Manuel Barroso, in a letter to the European Council saying that what Europe needs is — surprise — more austerity.

I’m tempted to do a point by point analysis of the data Barroso presents to claim that adjustment is proceeding at an acceptable pace. We know, for example, that what looks like a surge in Irish competitiveness is in large part a compositional effect, in which the relative robustness of highly capital-intensive industries (pharma) creates the illusion of a productivity boom. We also know that even where there are genuine improvements in export performance, as in Portugal, they aren’t contributing enough to aggregate demand to prevent a downward spiral from austerity.

But enough; clearly, the Commission won’t change course until catastrophe strikes. Mario Draghi’s actions, by stabilizing markets and bringing down spreads, bought Europe quite a lot of time; Europe is determined to waste all of it.

Next up was “Guest Post: The Fog of Amendment,” another guest post on Hungary from his Princeton colleague Kim Lane Scheppele. It’s longish:

The Fog of Amendment
Kim Lane Scheppele, Princeton University
Monday 11 March 2013

The Hungarian Parliament today passed a 15-page amendment to its one-year-old constitution against a storm of protest from both home and abroad. If it is signed by the Hungarian President, János Áder, the “Fourth Amendment” will wipe out more than 20 years of Constitutional Court decisions protecting human rights and it will reverse concessions made to Europe over the last year of difficult bargaining as the Fidesz government has tightened its grip on power.

The amendment’s passage came after a busy week of condemnation. Thorbjørn Jagland, secretary general of the Council of Europe, requested that the Hungarian parliament delay enacting the amendment until it could be reviewed by the Commission on Democracy through Law (the Venice Commission). By late last week, José Manual Barroso, the president of the European Commission, had called Hungarian Prime Minister Viktor Orbán to warn that the proposed constitutional amendments could violate the rule of law. And Victoria Nuland, the US State Department spokesperson, expressed the concern of the US government that Hungary’s constitutional amendments “could threaten the principles of institutional independence and checks and balances that are the hallmark of democratic governance.”

In addition, the Financial Times editorialized that if the Hungarian government passed the amendment, the European Union should remove Hungary’s vote in EU matters, which is the most severe punishment that the European Union treaties permit. The FT was joined in this call by The Independent on Sunday.

Hungarians are worried, too. New civil society groups staged demonstrations this past weekend in defense of both basic constitutional principles and the Constitutional Court. The new slogan of this new movement is “The constitution is not a plaything.” (“Az Alkotmány nem Játék!”)

Former Constitutional Court President and President of the Republic László Sólyom published an article today (in Hungarian) urging his successor national President Áder to veto the Fourth Amendment. “What is happening is not a constitutional amendment, but is tantamount to a surreptitious introduction of a new constitution with a whole new identity,” former President Sólyom said.

Despite all of that, the Fidesz-dominated Hungarian Parliament passed the Fourth Amendment with the governing party’s reliable two-thirds majority because, say governmental spokespeople, these are mere “technical” amendments that should not cause anyone concern.

Tibor Navracsics, Deputy Prime Minister, wrote a long letter to the secretary general of the Council of Europe last week, explaining why the constitutional changes are not dangerous and Spokesperson Kumin has attempted to simplify for a lay audience what the Fourth Amendment is all about. From these statements, we can see that Hungarian government is attempting to cover its tracks in fog.

According to Mr. Navracsics, the constitutional amendment is “to a great extent, merely a technical amendment” and that the “significance and novelty of this Proposal should not be overestimated.” According to Mr. Kumin, “if you take the time to look at the text itself, you can see that this is a lot of excitement over what is essentially a question of legal procedure, not substance.” In short, nothing to worry about; it’s all purely – well – legal.

The government denies that constitutional amendment takes back concessions it made to European bodies that were worried last year about the Fidesz government’s consolidation of power or that it overturns prior Court decisions.

What had Europe worried about? Europe had criticized the outsized powers given to the president of the National Judicial Office (NJO), a new office occupied by a single person who alone can hire, fire, promote, demote and discipline virtually any Hungarian judge. Last year, Hungary backed down a little and compromised by placing a few restrictions on the absolute powers of this office. The resulting law gives judges more of a say in their own self-governance and adds some procedural guarantees when the president of the NJO moves cases from one court to another.

But the purpose of a constitution is to place certain legal principles above others so that the lower ones may be measured against the higher ones. If the guarantees promised to European bodies exist only in laws that are inconsistent with a provision of the constitution, then those lower laws may be declared unconstitutional. Far from being a merely technical amendment, the Fourth Amendment has elevated strong powers into the constitution while leaving the promised restrictions on those powers in the lower law.

For example, the Fourth Amendment gives the president of the National Judicial Office the power to “manage the central administrative affairs of the courts” while judges merely “participate in the administration of the courts.” (Art. 13[1]). So then what happens to the power that judges were given last year to make guidelines that constrain what the president of the NJO may do? What if the judges had been given a veto over some of the powers of the president of the NJO, as the Venice Commission argued that they should? A future Constitutional Court could easily find those incursions on the absolute power of the president of the NJO to be unconstitutional. After all, the restrictions to which Hungary agreed on the powers of this office didn’t make it into the constitution. Only the unconstrained power of the office is in the constitution; the restrictions are left in the laws. And in a conflict between the two, the constitution wins.

Europe had also been worried about the power of the president of the NJO to move any case away from the court where it is assigned by law and to another court of her choosing. The Fourth Amendment now puts into the constitution her absolute power to move cases in order to achieve speedier resolutions. But while Europe extracted concessions on that point (the president of the NJO is now supposed to give reasons why particular cases are moved and can move cases only subject to guidelines passed by the main organization of judges), those concessions are not in the constitution itself. Only the power to move cases was added by the Fourth Amendment, not the restrictions on that power. Are Europe’s restrictions now unconstitutional?

Europe had also extracted concessions from the Hungarian government with respect to media regulation. But the Fourth Amendment imposes press restrictions in the middle of political campaigns. Mr. Navracsics argues that “[i]n order to reduce the campaign cost and create equal opportunities for the parties,” the Fourth Amendment bans all political advertising during electoral campaigns except ads in the public media. He doesn’t mention that the public media were largely purged of employees that sympathized with the democratic opposition in a prior “austerity” drive. Or that the public media reach many fewer Hungarians than the commercial media. Or that parties may not advertise in the national media at all if they do not have a national party list (which itself requires signatures from all over the country, something very hard for liberal parties to achieve). No matter what Hungary promised Europe, this new restriction trumps everything else.

But wait! Why would the Constitutional Court strike down the laws that Europe wanted? Aren’t the constitutional judges the good guys here, saving the constitutional order from a power grab?

That may have been true until now, but already the Fidesz government has added one new judge to the Court two weeks ago and will name its ninth judge on the 15-member court next month. The new Fidesz majority is very likely to be different from the narrow majority that kept the Fidesz government in line over the last two years. So we should not be surprised if a new Court majority uses the provisions of the newly amended constitution to strike down laws that the Fidesz government passed under pressure, laws that now restrict the government’s power to do whatever it wants to do. Because the concessions to Europe were not built into the constitution but instead remain only in laws that are now arguably inconsistent with the Fourth Amendment, the restrictions counted on by Europe to ensure that Hungary kept its European commitments are now vulnerable.

What about the criticism that the Fourth Amendment has attacked the Constitutional Court by reversing and nullifying its decisions? Both Mr. Navracsics and Mr. Kumin argue in response that Fourth Amendment gives new powers to the Court, so it should not be interpreted as an anti-Court move.

Yes, it’s true that the Fourth Amendment gives the Constitutional Court the power to review constitutional amendments for constitutionality. But the Court may only assess formal unconstitutionality – that is, whether amendments were passed in the proper manner. The Court already had this power so this is nothing new. However, the Court is explicitly denied the ability to review constitutional amendments for their substantive unconstitutionality – that is, whether the amendments violate basic principles guaranteed elsewhere in the constitution. That is a new limitation, particularly important because the Constitutional Court had recently announced that it had this power – but obviously not for long.

And yes, as Mr. Navracsics points out, more officials may now take cases to the Constitutional Court for abstract review (review of a law conducted without a specific case to trigger the review). And that expands the ability of the Constitutional Court to review laws. Under the Fourth Amendment, both the head of the Curia (formerly called the Supreme Court) and the chief public prosecutor can now bring abstract challenges to the Court. But Mr. Navracsics fails to note in his letter to the Council of Europe that both of those offices have been filled by Fidesz appointees for terms that will last a long time. Moreover, the constitution now exempts both of those offices from the general retirement age so the occupants of those offices can stay even longer. No comparable ability to challenge laws has been given in the Fourth Amendment to any office not currently occupied by a Fidesz appointee. If the government does manage to change hands at the next election, the changes made in the Fourth Amendment will give the continuing power to challenge laws to Fidesz appointees who are guaranteed to be in office through several election cycles.

And, of course, the Fourth Amendment wipes out more than 20 years of human-rights-protecting constitutional case law, something that the government has not even tried to defend. Moreover, the government now inserts into the constitution again (because it was declared unconstitutional once already) the restriction on the Constitutional Court’s jurisdiction so that it may never review a budget or tax law passed during a time when the country is under fiscal pressures.

Finally, both Mr. Navracsics and Mr. Kumin claim that the Fourth Amendment is merely “technical” because many parts of the Fourth Amendment were previously included in prior constitutional amendments that were nullified for procedural reasons by the Constitutional Court. And so, they say, reintroducing constitutional amendments that were never nullified on substantive grounds is no offense against the Constitutional Court. That’s “technically” true as far as it goes, but it hides important information.

A bad amendment passed again is still a bad amendment. But more crucially the context has changed since the first time these amendments were enacted. The Venice Commission has since strongly criticized many of the permanent changes introduced by the “Transitional Provisions on the Constitution,” the earlier “amendment.” Reenacting those very same provisions may formally comply with the Constitutional Court’s judgment that said the amendments had been procedurally flawed the first time around. But the same action sticks a thumb in the eye of the Venice Commission, which had already objected to the overweening powers of the president of the National Judicial Office, the overly centralized system of media regulation, the lack of anti-discrimination protection for gays, the lack of a constitutional prohibition on the death penalty, and more. In addition, the Fourth Amendment blocks the Constitutional Court from reviewing amendments for substantive conflicts with basic constitutional principles. As a result, the provisions in the Fourth Amendment can never again be challenged for substantive constitutionality even though the Constitutional Court was starting to work its way though many of these provisions when the Fourth Amendment was proposed.

The government’s strategy when under attack is to insist that it has been misunderstood, that foreigners have too little information and that technical changes to technical documents shouldn’t cause any alarm. Hungarian government spokespeople generate a public relations fog to disguise a major step backwards from the rule of law as a mere technical adjustment. As the government brazenly passes a constitutional amendment that its allies have urged it to delay, the world can see that Hungary has become a country in which the law follows politics rather than constraining it.

But Hungary’s allies should see through the fog of amendment. By now it should be clear that Prime Minister Viktor Orbán and his Fidesz party recognize no limitations in their quest for power.

The third post of the day was “Flimflam Forever:”

I took Paul Ryan’s measure two and a half years ago. All the Very Serious People were very angry with me — Ryan was the Serious, Honest Conservative, the guy centrists demonstrated their centrism by praising. But he was an obvious phony. His “plan” was all smoke (I couldn’t even find any mirrors), with all the alleged deficit reduction coming from closing tax loopholes he refused to specify plus projected reductions in discretionary spending that he also refused to specify. Meanwhile, he was pursuing radical redistribution away from the needy to the wealthy.

Nothing has changed, except that the plan has gotten even crueler.

So while I may do some analysis later today, the only really interesting question is how the VSPs will react. Have they had enough of the Flimflam Man? Or does hype spring eternal?

Yes, hype does spring eternal. The last post of the day was “All Me, All the Time:”

The Krugman Times. Funny stuff — but I can’t afford to subscribe, having bankrupted myself buying Portuguese wine and antique British cloth and all that.

Also, I’m doing BBC Newsnight in about an hour, although it won’t feel the same doing it from central New Jersey.

One Response to “Krugman blog 3/12/13”

What can be done about Ryan? Hungary sounds like the Muslim Bro. Has the world turned without leaving notice? We have assumed for a hundred years that civilization makes progress. We may be wrong. What can be done?